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ARTICLE · 21 JULY 2014

Consultation On FX Financial Instruments

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Under Directive 2004/39/EC on Markets in Financial Instruments (MiFID) a contract considered as a financial instrument may give rise to authorisations and other obligations.

European UnionFinance and Banking
Bonn Steichen & Partners
Bonn Steichen & Partners

We reported in our Newsletter of March 2014 that on February 14th 2014, ESMA, in the context of the European Market Infrastructure Regulation (EMIR), sent a letter to the European Commission (Commission) asking for clarifications on the classification of foreign currency (FX) financial instruments.

Under Directive 2004/39/EC on Markets in Financial Instruments (MiFID) a contract considered as a financial instrument may give rise to authorisations and other obligations. Whether or not an FX contract can be defined as a financial instrument has therefore important implications as regards authorisation requirements under MiFID, but also as regards the scope of application of other EU financial regulations including EMIR, the Capital Requirement Directive and Regulation (CRD4) and the Market Abuse Regulation since they all cross-refer to the definition of financial instruments under MiFID.

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